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South Africa’s Competition Commission has referred major inverter manufacturer Victron Energy for prosecution by the Competition Tribunal over alleged resale price maintenance.
Victron is a well-known supplier of electric power conversion products for mobile and other off-grid applications.
Its products include inverters and solar panels used in recreational and commercial boating, overland transportation, land-based off-grid energy systems, and industrial environments.
Reliable solar installers in South Africa often recommend the brand, although its pricing has been a sore point for many of them.
The Commission explained that resale price maintenance was an agreement by a manufacturer that prevented downstream distributors or resellers from reselling a product below a stipulated price.
It said this practice restricts and prevents price competition downstream as it restricts the pricing autonomy of distributors or resellers.
In South Africa, this is prohibited under section 5(2) of the Competition Act, 89 of 1998.
The Commission alleged that the Dutch company engaged in the practice from March 2020 until at least the end of 2022.
It wants Victron to be slapped with a maximum penalty of 10% of its turnover in South Africa.
Victron’s inverters are available online from several reputed solar and backup equipment retailers in South Africa.
The Commission said the referral for prosecution stemmed from a complaint lodged by a member of the public.
Its investigation found that Victron largely relied on its distributors — including Get Off Grid, Segen, Innomatic and I-G3N — to implement and enforce resale price maintenance on products sold online in South Africa.
The Commission also determined that Victron regularly published a recommended retail price list on its website and provided updated price lists to its distributors every quarter.
“Although the list indicates that it is a recommended price, Victron, in practice, insists on a maximum discount from its recommended retail price list when the Victron products are sold to end customers by online stores,” the Commission stated.
“Victron instructs its distributors to ensure that its online store customers comply with the maximum discount practice by threatening to either lower the discount provided to the distributor by Victron or by stopping supply to the distributor.”
“The distributor would then use similar threats of either lowering the discount provided to the online store by the distributor or by stopping supply to its online store customer to ensure compliance.”
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